TOP 100: Business Mixed for Rentailers in Bear Game Market

A flat video rental market has caused many national chains to embrace video game rentals — despite their associated costs — as a key to long-term survival.

“We've seen studies within the industry that are proving that more and more consumers are trying [video games] before they are buying,” said Chris Roberts, SVP of sales at Portland, Ore.-based Rentrak Corp., which operates a revenue-sharing program for games.“Rentals are driving sellthrough.”

With more than 6,000 retail outlets, Blockbuster emerges atop the chart in video game rentals. This, despite the fact that Blockbuster game rentals as a percentage of revenue in 2003 dropped 0.9 percent compared to 2002, according to the company's 2003 fiscal year results.

Hollywood, the No. 2 video rentailer in the United States, generated more than $119 million in video game rental revenue last year — independent of $180 million in sales revenue, which includes hardware and accessory sales from 600 Game Crazy outlets. The store-in-a-store concept, which does not rent video games, nonetheless represented a $17 million loss to overall earnings.

After test-marketing its Game Zone in-store concept last year, No. 3 Movie Gallery expects to expand the idea to 300 units this year, upping game rental gross revenue from 8 percent in 2003.